Wednesday, 23 February 2011

My Book Will Make Me Rich!

Think again.

The idea that writers make a lot of money is a misnomer. And a terrible one at that. Those that do attain wealth are a rare 1% and still cannot contest the riches of  Hollywood, Business or Sports People.

Today I will attempt to show you just how little money a writer makes, even if they do attain a sweet advance.

(Note: This will not take into account royalties, foreign sales, film options and other revenue sources; this is a basic calculation of the losses attributed to the advance paid by a publisher. The 2011 U.S. Federal IRS taxes will be applied.)

In publishing, you gain what is called an advance. This is a publisher's estimate of risk and can fluctuate based on market trends, sales record and foreign rights potential. Basically, a publisher pays you based on how well they assume your novel will sell. The average author receives $30,000 and can climb to as high as $5,000,000 (as with the case of Audrey Niffenegger's second novel, Her Fearful Symmetry). The module used to define the monetary value of an advance is as follows:

"nice deal"   $1 - $49,000

"very nice deal"   $50,000 - $99,000

"good deal"   $100,000 - $250,000

"significant deal"   $251, 000 - $499,000

"major deal"   $500,000 and up
(Learn more about an advance here)

An agent can get you a decent advance, as well as build your career, however, he needs to be paid and so does the government, apparently. The IRS deducts anywhere from 10% - 35% of your earnings (after deductions and exemptions) and an agent takes 15% of whatever monies you make from the works he sold. Let's assume you got lucky and landed a good deal, before you quit your job to become a full time writer, understand that that amount isn't what you get.

Agent's Cut:
15% of $100,000 
= $85,000

IRS Tax:
Tax Year:  2011
Filing Status: Married, Filing Jointly
Taxable Income: $85,000
Tax: $13,500
Percentage of income: 15.88%
Tax Bracket: 25%
Your disposable income will be: $71,500
(Calculate your taxes here) 

This still isn't too shabby - most authors don't receive good deals, even for series books -, but is by no means enough to support a family of four. . .five. . .six for a year. You can, however, make good money from writing, but that, like all things, take time.

So, if you have dreams of becoming rich and famous from your first book, then I must sadly inform you of your delusion. Let that novel be the stepping stone to a bright career - and who knows. . .you just might make it into that coveted 1%.

1 comment:

Ron Smith said...

Very interesting post. I read those deal news at Publishers Marketplace, too, and wonder exactly how much money an author gets over time.

Oh well, I'm nowhere near that. Still need to query my second novel!

Nice blog you have.

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